re plaque than a regular manual brush. it seems like it gets more to areas of your mouth that you can't reach with a regular toothbrush. [ male announcer ] guaranteed "wow" with deep sweep from oral-b. #1 dentist-recommended toothbrush brand worldwide. >> my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now. >> hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends, i'm just trying to save you some money. my job is not just to entertain but to educate you. call me at 1-800-743-cnbc. battle stations! that's where we are on the eve of the hugely important labor department nonfarm payroll report that comes out tomorrow morning at 8:30 a.m.

the stock market is telling us we need to be ready. we just had our fifth straight decline today. dow sinking 68 points, nasdaq declining .12%. we know that's because there's been too much good data lately. it should be that, no, good data. because we are in a good news is bad news environment. since good news moves interest rates higher, whether the fed likes it or not! remember, the fed wants rates down so more jobs can be created. but at a certain point, you have to ask, aren't more jobs being created? the fed stops trying to keep interest rates down or stops being able to. it's a foregone conclusion that when rates rise, the whole stock market will decline regardless of what the fed says or does. that's been the case before even as the last late run-up. it's going to be the case again. i'm not debating that. there are tons of reasons why stocks could. we know risk-free bonds that generate returns of 3% on the ten-year treasury and 4% on the 30-year treasury.

a prediction of where we'll go on a strong employment number. will, indeed, be killer competition for dividend stocks with high yields. we know this because even the run from 1.8 to 2.8 on the ten year treasury crushed two of the highest yielding groups out there, the reits and mlps. they have not been able to withstand the higher rate onslaught. they could be canaries in the coal mine for the products that yield more than 3% or roughly about that. but are a great deal -- been up a great deal for the year because the earnings have been by and large fantastic. but that will not protect them if interest rates go much higher on a strong employment number. plus, there's a whole other group of investors who will flee the stocks of any other company hurt by higher rates. housing trading in lock step with treasuries but also cyclical companies with earnings that were just beginning to kick in as the data turns positive. and they're going to sell the utilities. again, you know the drill, you know the litany.

that is not exceptional. it's not why you come to "mad money." let's change things up for a second. do it the "mad money" way. let's accept that the groups will and deserve to get hammered, hammered further given the bond competition. let's also presume that the sellers won't take any prisoners, right? they'll use the s&p 500 futures to hedge or sell stocks, and that will knock most of the 500 names down simultaneously. that's what happens when they come in like that. >> sell, sell, sell! >> they're indiscriminate, is the word. isn't it worth asking what stocks might actually benefit from higher rates? that's what i want to talk about now. rather than bore you with what everyone thinks will happen, i'd rather take a shot at making you money. after what everyone is predicting actually comes true. before i go there, though, keep in mind the classic admonition that no operation extends with any certainty beyond the first encounter with the main body of the enemy, or no battle plan survives contact with the enemy. if we don't get a gigantic number or more important, perhaps people sort through the data and decide it's skewed

usually by government workers returning to their posts, then this battle plan won't be any more useful than the new orleans saints battle plan last week against the seattle seahawks. meaning it has to be scrapped immediately, hopefully for something unlike the saints game plan actually works. suppose the jobs numbers -- what stocks do better? a higher rate environment? first, the banks. i have no doubt they'll get hit tomorrow and be bloody because they're a huge part of the s&p and there's a ton of misperception about them. we've seen major downgrades of the banks, two alone for citigroup and one for morgan stanley. so before you think how easy this is, remember these downgraders -- well, as soon as the stocks get hit, will reiterate the negative stance and someone will say, hey, it's bad for the banks because no one likes to give up a profit. everyone has the right to be wrong. i think these analysts will be wrong. that said, i know that banks actually do better when rates go higher. how do i know this? because jamie dimon explained it

to me personally when i interviewed him, and he's the ceo of jpmorgan. in order to really get earnings to expand, he needs rates to go to 4%. that's right. you can raise earnings on the bank stocks starting tomorrow if this battle plan is correct. the analysts will most likely not do so. why? they're worried too. maybe they do it on tuesday? so the fog of war , to quote another german strategist, that might give you the opportunity. and if you think my of two bonds recommendation means you can buy the stock of safeway, the owner of the supermarket chain, think again. let's say you don't want exposure to jpmorgan because you think the bank's in too much legal trouble. by all means go with morgan stanley, which is becoming much more of a depositor's institution, and that means risk-free assets and pays you less than they earn. the net interest margin. we're going to be talking to the quintessential bank stock later in the show, texas capital bank shares, as it'll make money

lending money to companies that are doing well and clean up on those deposits too, and they're not in the crosshairs of anybody. now let's get beyond the banks. my colleague david faber had an amazing interview with kyle bass this morning on "squawk on the street." he's buying gm aggressively. i was kind of blown away by this. he said, listen, one of the chief reasons is that a big jump in rates could ease the pension liability burden of the company. why didn't i think of this myself? that's because general motors can invest money and get a better return that could then lead to an $8 billion swing in profits over time given the company's $27 billion pension liability. i'm an idiot. i heard that. why didn't i talk about that? that's a great call. who else gets a pension boost like that? general electric, boeing, and dupont. given that all these will be hammered tomorrow, according to our battle plan, that could be a silver lining worth considering. although, we have to recognize that most investors will initially think who cares. higher rates, lower sales, higher costs. they will not be thinking pension savings, but maybe they should. another idea, how about the payroll processors. morgan stanley rolled out the

coverage of paychex. they started with a sell. but i want to buy paychex, because the benefits from increased formation, which is part in parcel for demand of more money that causes rates to go up in the first place and gets to make money off the float. that's been a huge reason to own the stock in the past when rates were higher. it will be again, although not initially, i would buy the stock if it gets hit tomorrow, though. finally, there's a huge hidden positive. the cash hoards may be better invested at better rates. right now a ton of cash has meant nothing for companies because they like to invest the money short-term. and they can't get much in return because the rates are so low. but when rates go higher, suddenly that cash is going to be worth much more because it'll generate a more meaningful return. who has the most cash under management? and that's really what we're doing here, managing the cash. how about apple? yeah. that's why, if rates spike, i would reach for shares of this incredibly undervalued company

that barely budged higher on the exciting new news of a deal with china mobile. it was part of the s&p and the s&p got hammered on fears of rates going higher tomorrow. finally, might want to buy the stocks of companies that are huge buyers of their own stocks. the big four, viacom, aol, and time warner. aol is not a big one, but one of the big four buybacks. they seem addicted to shrinking available shares. i'm sure they'll be in there monday taking advantage of any rate-related decline to do some buying.. here's the bottom line. while the fog enshrouds all stocks tomorrow, pick up an apple or paychex or one of these companies i mentioned. when the fog clears, that is where the action will be. you need to get before, not after the crowd. chuck in new jersey. chuck? >> caller: hi, jim. this is chuck the tennis pro from belmar. i want to thank you for taking my call, tell you what a wonderful job you do. i watch you every day, and i was researching tiffany's. i actually started to research it in july when it was $71 a share.

i went into a jewelry store to check out the inventory. a salesgirl produced documents saying the gold jewelry was bought at about $1,800 an ounce and the market had it at about $1,400 an ounce. and it just made me be scared because i didn't know what i was looking at. considering the job report is tomorrow and that can dramatically affect the price of gold, how does the price of gold, the dollar, the euro and the yen play into this company's balance sheet and income statement? >> well, first of all, that's great homework and you're right to do that and i'll buy you a dinner for that. but it's just a small part of tiffany's business. it does not matter as much as your little jewelry guy really struggling with the inventory. and that's why i'm not fretting the program. however, the stock is too high. why? because goldman came out today and recommended it. and we chuckled -- we chortled on "squawk on the street" saying, oh, now?

stock's too high. i would be a quick schnitzler of it. buy a little lower. eric in new york. eric? >> caller: hey, jim, thanks for having me. my second time calling. >> well, that's great. >> caller: jim, my question is about xec. i'm wondering what you feel the future outlook for the stock is. >> guys taking profits. it's up a lot, you know it's one of our permian plays, we think it's absolutely terrific. but we also have a positive attitude toward oil here. let's go to tim in california, please. tim? >> hey, cramer. i'm long in pcp. >> i think it's a great move. i think boeing uses a huge amount of precision. pcp has been one of the best stories because of the major league cycle that includes the fact that you can't get a dream liner until around 2020. i'm warming up -- you know i like alcoa too because they're

the biggest maker of two million screws in a plane. but it's a really terrific company. i'd be a buyer. as rates jump, the fog will continue to spread. do you have your battle plan? i just gave you mine. "mad money" will be right back. coming up -- nice view? hilton worldwide is planning the hospitality industry's biggest ipo to date. wall street may be lining up to book a room, but are there better accommodations available? keep your reservation with cramer to see which stock may deserve a long-term stay. and later -- lone star shining? everything's bigger in texas, especially its monster oil and gas finds. but there's more than one way to play this trend. texas capital bank shares has been cashing in on the economic boom. should you make a deposit? find out in cramer's exclusive. all coming up on "mad money." don't miss a second of "mad money."

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all right. who can blame anyone for not selling on the employment number tomorrow? i'm fearful of a strong number, but i'm also mindful we're seeing a regional boom in oil and gas related companies, something i've talked about a great deal on the show, including earlier tonight and this game-changer gives me hope that some stocks can go up on better than expected earnings, right into the teeth of rising interest rates, bucking the tide we saw on our screens today and the last four days before. that's why i want to talk about conns. a hard goods retailer selling everything from home appliance to furniture, television, computers, that shot the lights out when it reported this morning, vaulting the stock over 19%. wow, on a down day.

the number was better than expected, we have to look at a breakdown of where the stores are. something's clearly going on underneath that's too big to ignore. you don't see this kind of environment where the best retailers are struggling as i told you last night, unless there's been an enormous sea change in the area where the company in question operates. here's the neighborhood rundown for conn's. 22 stores in houston, 14 in dallas, 11 in san antonio, and 11 more in cities through texas. six stores in louisiana, two in oklahoma, one each in arizona and new mexico. when you think of the geographical alignment, you realize basically conn's is the retailer for the red hot oil and gas region. the company i believe is seeing the miracle of eagleford and permian playing out firsthand. the beginning of the ancillary earnings story that can buck the whirlpool of higher interest rates. and witnessing the wonder of job creation. talk about a cramer fave that just won't quit. not to mention the need for so many workers to surround the beehives of activity related to

exploration and production. yep, this oil and gas boom, we're seeing a tremendous job multiplier playing out right now. think of what's happening with gtls, the company with the best technology for transforming natural gas into something similar to gasoline. as ceo sam thomas told us the other night, all the better to build the hard to construct big boxes that encompass the transfer technology and put them on boats to take them overseas. the company can't get enough workers to make these boxes. i know welding requires a particular skill set that may not be available in louisiana right now. it will take time, they will get there eventually. chart's also making a device to build out natural gas stations. and more important shell. yeah, shell's building them now. these stations cost between $1 million and $1.5 million. and these companies are building perhaps as many as 400 stations, and the cost is going down. once that buildout gets rolling, they'll get a reverberation as far as indiana, where cummins is located, because cummins is making truck engines that are perfect for long haul truckers. they've been waiting for these engines.

don't forget about the pipe and train tracks that need to be laid down to transport the stuff from where it's produced to where it's needed. i believe they're already impacting the gross domestic product and payroll numbers. i think the gdp had a tinge of this this morning. i know any job gains that are above the baseline will cause interest rates to jump. i know higher rates can hurt the stock market for a variety of reasons. that's why there's so much fear and it's justified. i'm simply pointing out higher rates don't have to be the end of the world, provided that revenues are strong and the earnings that come from them bountiful. and perhaps conn's is a microcosm of what can occur. here's the bottom line. okay, it's a stretch. it's a stretch. but soon there may be many stretches, and that's what needs to happen to combat the good news is bad news conundrum that's caused us to be down five days running. it's a read, but i think it's a fat read, not a thin one, that i trust others will finally be talking about in 2014. charlie in florida. charlie? >> caller: yes, jim, thank you so much for taking my call, it's an honor to speak with you, jim.

>> thanks for coming on the show. >> i watch you all the time. and i called about a stock that i bought, which was heckman and bought by navarra. it was split, way down from the original price when you first spoke about it, which was $4. and i'd like to know if i should take a loss, get rid of it. >> you know, it's been a terrible stock. i like the bloodlines of it because dick heckman made a lot of money in u.s. filter. i think he's got to come back on and he's got to tell us why the company is really performing this poorly, because there's a lot of drilling going on in the country. i don't like it pending hearing from dick about why i may not be wrong not to like it. it's been bad, and i apologize to those people who say, well, i think cramer really liked it. i did and do like dick heckman, but this has not been a good stock. i just owned the fact i liked it and i was wrong. roland in new york, roland?

>> caller: i have a question -- i retired early, have an i.r.a. i'm looking for conservative dividend income and i've recently been looking at kmp, kinder morgan partners. really would like to know your opinion about it. >> check with your tax accountant, because some stocks cannot really go into i.r.a.s because of a business tax. you want to be sure. you've got to talk with your accountant about these. the stock had a not great quarter and it's been knocked down. and the master limited partnerships have all been coming down. but i believe in rich kinder. rich kinder is not dick heckman. dick heckmann had a terrific company around, this one's not it. rich kinder made a lot of people a lot of money. i'm not going to abandon that company. but i do honestly right now like linn energy more. higher rates don't have to be

the end of the world, conn's might be a microcosm. wouldn't you like to have a stock that goes up gigantically? or would you say i don't want that gain because rates are going higher? stay with cramer. coming up -- nice view? hilton's more than $2 billion ipo is about to hit the street. are there better accommodations for your cash, or should you try and book a room in this newly minted stock?

you know that this has been a downright incredible year for initial public offerings. >> buy, buy, buy! >> so far, we've had 210 ipos in 2013, the average deal giving you a 20% return, according to ipo fund manager renaissance capital. i bring this up again because we've got an enormous deal coming next week, the hilton ipo. and i think you should try to get a piece of it. i'm not just highlighting this one because the ipo market has been so strong, either. hilton is a high-quality company in an industry that's currently en fuego, with demand outstripping supply. and if the economy keeps improving, things will get even better for the hotel operators. hilton is, in fact, the world's largest hotel chain. it's under a number of brands, not just hilton.

waldorf astoria, conrad, doubletree, embassy suites, hampton, homewood suites. now it's expected to price next thursday at $18 to $20 a share. i want to give you a head start to focus on this one. a little over a week, stock's trading under the symbol hlt. at the midpoint of that range, this would be a $19.3 billion company and the stock would be fairly expensive by most metrics. however, i still think it makes sense for you to try to get in on the hilton deal. let me tell you why. i think it's likely the stock will pop on the first day of trading, as has been the pattern for the vast majority of ipos this year. some of that is because hilton is private equity backed ipo by blackstone. blackstone took the chain private in 2007 and now they're spinning it off again as a private company. last month we saw another hotel play from blackstone come public. i'm talking about extended stay. and that one jumped 19% on the first day of trading. i didn't get in front of that enough to tell you to buy it. i'm not making that mistake this time. and because blackstone owns a ton of other companies they'd

like to take public, they have every incentive to make sure something as high profile as this hilton deal works out well for everyone. and i'm betting they're telling the underwriters to make sure of it. i have been recommending blackstone for some time and not backing away from that either. if you can't get any stock in the ipo, i don't want you paying a penny more than $26 for hilton. did i pick that out of the sky? you need to understand when you're dealing with companies with lots of debt, physical assets like the hotel stocks, sometimes the best way to value them is by using what's known as the enterprise multiple, and that's the enterprise value, the market capital, all the debt on the balance sheet and divided by the earnings before interest, taxes, depreciation, and amortization. i've been putting it at a 30% premium to the publicly traded hyatt. i believe they deserve to trade at a higher premium. but once the premium gets too high, the stock becomes too expensive relatively, and i'd rather have you fall back on

cramer fave starwood, symbol h.o.t. hilton and starwood are by far the best two players in this industry. hilton is the largest hotel operator by far with over 4,000 locations. starwood number two with 1,200 properties in 100 countries, and this is an industry where scale does matter. beyond size, though, we also care very much about geography. the u.s. market is pretty much saturated with big hotel chains, which means you need exposure to the rest of the world if you want to grow. starwood has that in spades which is why i've been recommending it for ages. 60% of the rooms are outside north america, last year, 60% of the earnings came from overseas and the company plans to get that up to 80% in the not too distant future. remember talking about moving to china when he was opening a lot of those. within the pipeline, 85% of the new locations they're working on are located outside the united states including in china. right now they get just 27% of the revenues from outside the u.s.

but hilton understands that international is the future, as 80% of their rooms under construction are located overseas. that makes hilton a better buy than hyatt or marriott. we also care about the business model with these hotel stocks. it's much better to have an asset, what's known as an asset light model where other people own the actual real estate and pay you to either manage their properties or to franchise your brand. this is the model starwood has had so much success with. in 2000 they owned 70% of the hotels, now that's down to 25%. hilton's very much moving this direction too. hilton owns or leases 156 hotels, the other 3,383 in their system are owned by third parties who pay licensing fees. right now the side of the business 52% of hilton's earnings before interest, taxes, depreciation and amortization. and they're focused on this part of the business because it's the cheaper, smarter, faster way for a chain to grow and turning them into a total cash machine. marriott and hyatt, on the other hand, are also trying to become more asset light, not doing it as quickly.

how about the revenue per available room? that's the key metric to the hotel industry. last quarter, best of breed starwood saw a 5% increase in worldwide revenue per room. hilton is in line over this past year. then there's the pipeline, the number of new rooms in development. hilton has 176,000, 99% of which are in their higher margin management and franchise segment. starwood has 100,000 rooms in development. excellent considering they're growing off a smaller base than hilton. hyatt is a laggard. how about valuation? hilton's going to be very expensive on a price to earnings multiple basis, probably going to fool you, you're going to say i'm not paying that. but, remember, the way to value hotel stock with a bunch of debt, and hilton will have $13 billion worth of debt, is using that enterprise multiplier. hyatt has an enterprise multiple

of 14, marriott's 13. that metric makes less sense for them. at the midpoint of the price range, hilton would have a price to earnings multiple of 15, which is not that expensive. that's also why i'm telling you not to pay more than $26 for hilton in the aftermarket, because at that point it stops trading at a deserved premium and simply becomes too overvalued for me. here's the bottom line, call your broker and ask to get a piece of the hilton ipo. if you can't get in on the deal, don't pay more than $26 in the aftermarket. at that point, just take a pass. and if you want to own a hotel stock, stick with starwood. we know it's a winner, and as long as he's running that joint, count me as a believer. gayle in florida? >> caller: hi, mr. cramer, pleasure to speak with you. >> same. >> caller: i would like to know about priceline. i have a question about that. first it was on the market, then came off the market and no one knew it went back on the market. how did that happen? >> well, i'm more focused on

where price line the stock is going. the answer is that this isn't -- $1,100 stock that's ultimately headed much higher. i think you should own priceline. it's one of my favorite stocks. guy in georgia? please, guy? >> caller: boo-yah, jim. i want to buy ryman hospitality, rhp symbol. i trust you more than i trust myself. what do you think? >> well, first of all, you shouldn't do that. you should always trust yourself more than you trust me. i'm out there trying really hard, and one of the reasons you're going to like what i have to say is i have to do work. i cannot offer you a better ryman hospitality decision than you can right now. i can do that work. i do like that business. let me come back. all right. need your portfolio to get to your next destination? i want you to buy some hilton, hlt on the ipo. no more than $26. stay with cramer.

tomorrow, kick off the trading day with "squawk on the street." live from post nine at the nyse. >> just like there's a bidding war in oil and gas, there's a bidding war in brains. >> it all starts at 9:00 a.m. eastern. every day we're working to be an even better company - and to keep our commitments. and we've made a big commitment to america. bp supports nearly 250,000 jobs here. through all of our energy operations, we invest more in the u.s. than any other place in the world. in fact, we've invested over $55 billion here in the last five years - making bp america's largest energy investor. our commitment has never been stronger.

so ally bank has a that won't trap me in a rate. that's correct. cause i'm really nervous about getting trapped. why's that? uh, mark? go get help! i have my reasons. look, you don't have to feel trapped with our raise your rate cd. if our rate on this cd goes up, yours can too. oh that sounds nice. don't feel trapped with the ally raise your rate cd. ally bank. your money needs an ally.

it is time. time for the "lightning round" on cramer's "mad money." rapid-fire calls, you say the name of the stock, i tell you whether to buy or sell. play until this sound and then the "lightning round" is over. are you ready, skedaddy? i'm going to start with randy in wisconsin. randy? >> caller: well, thanks for taking my calls, jim. this is randy from brew city, wisconsin, and my stock is facebook. >> well, look, i think facebook's fine. people say, jim, you're being two-faced because you sold facebook for your charitable trust. we're up 90%, and when we get up 90%, ca-ching ca-ching. that said, twitter came back to where it came public today, where it opened at $45, an umbrella moving the stock up. facebook probably has more upside, and i know a lot of the

social and mobile stories like veeva that we introduced to you at salesforce, also are doing well. j.j. in new york. j.j.? >> caller: professor cramer. >> hey. >> caller: big boo-yah to you. >> boo-yah right back. >> caller: i'd like some information on ezcorp. >> pawn shops don't do well when the economy gets better. people are going to sell that pawnshop and move up to something like tiffany. i don't want to recommend tiffany, it's up too much, but i would buy that on a pullback and not own ez. phil in illinois? >> caller: cramer, cramer, cramer. >> boo-yah, boo-yah, boo-yah. >> caller: what do you think about sky works? >> a 52-week high. i do not like the different pieces that go into a cell phone, but the china mobile deal is hugely positive for sky works and it's a very well-run company. i'm not going to recommend it at a 52-week high. but i do think if you have to play a parts component play, it is -- it should be skyworks for cell phones and it should be micron for pcs.

let's go to arun in new york. >> caller: hi, i'd like to know if redn is a buy at this current level? >> all right, let's understand regeneron. it's one of those stocks, wild trader. let's say it's 28 instead of 283. i think the future's bright for regeneron, they have a drug where if you can't tolerate statins, you can take their drug. that's going to be approved very soon. we know this macular degeneration drug is being rolled out all over the globe. you have to buy it in stages on the way down. don't buy it at once. buy it lower. take a look at the strategy. let's go to jeffrey in texas. jeffrey? >> hey, jimbo. >> how are you? >> caller: great big texas boom baby, boo-yah. >> i'll give you more of a texans boo-yah than a cowboy boo-yah. what's up? >> caller: hey, my stock, i

picked it up in august, and it has already doubled. i wanted to know what your thoughts were. >> it's doubled, it's up 100%. we did a piece not that long ago on the biotechs saying the ones that have been hot are too hot and we want to take a little off the table and that would include that one. dan in kentucky. dan? >> caller: hey, cramer, this is dan in kentucky wishing you a big blue-yah. >> i'm taking that bluegrass boo-yah. i like kentucky a lot. spent a lot of time in lexington and louisville. wouldn't mind going back for the kentucky derby if we can swing it. what's up? >> caller: okay. what you think about lmt, lockheed martin. >> it's finally going down because maybe they solved the sequester problem? oh, give me a break. i wish the ceo would come on the show because i can't be more abject about the need to see her. she should come on the show. mental note. call her tomorrow. let's go to salvador in

illinois. salvador? >> caller: hey, jim, it's salvador from chicago. long-time listener, first-time caller. >> nice. >> caller: my question is about afop, alliance fiberoptics, and i wanted to get your take on that stock. >> it's tough. i was watching lvlt go up, akamai all over the place, it's more of a derivative play. and i feel like they're like cutler, you can pick them up, put them in your fantasy league, otherwise, not, i don't want to own it. donna in texas. >> caller: boo-yah, jim. so good to talk to you. >> same. >> caller: old man winter, i'm talking to you, it's heating up. >> let's go to work. what's up? >> caller: okay. flowers foods. >> too hard. i've got to tell you something, i think it was absolutely terrific growth company at one time, but i believe the bakery business is too hard. i've seen too many bakers, even

though this is a consolidation play, i've seen too many do not that well on the end so i'm not going to recommend flowers foods even though those people are incredibly nice. and that, ladies and gentlemen, is the conclusion of the "lightning round." >> the "lightning round" is sponsored by td ameritrade. coming up -- lonestar shining? everything's bigger in texas, especially its monster oil and gas finds. but there's more than one way to play this trend. texas capital bank shares has been cashing in on the economic boom. should you make a deposit? should you make a deposit? find out in cramer's exclusive. five tech stocks with more than a 10%...

people say don't mess with texas. i always think that's good advice. tonight i'd like to propose a corollary, don't mess with texas capital bank shares, that's tcbi for all you home gamers. at a moment where the banks are looking better and better by the day, courtesy of actual higher interest rates and that's good. one of the strongest regional banks out there, period. we know the economy in texas is booming right now, thanks in large part to oil and being found in places like the eagle ford shale, permian basin. texas real estate's on fire and it's a great place to start a

new business. very business friendly. no wonder that tcbi has rallied 23% in the past few years. a commercial bank operating in austin, dallas, ft. worth, houston, san antonio, which also does personal banking for wealthy professionals and entrepreneurs and they have a lending business as well. and that's where tcbi lends money to other banks so they can in turn originate mortgages. when the company reported back in october, tcbi missed estimates by three cents off a 77 cent basis. but the underlying metrics were so strong, people saw through that. growing 10% year-over-year. total deposits up 33%, pretty staggering, stock jumped 12.4% the next day. bank's on fire. let's check in with george jones. he's the ceo of texas capital bank shares, learn more about where his company's headed. mr. jones, welcome to "mad money." how are you, sir? great to see you, sir. have a seat. how do you grow organically that kind of deposit base. is that just because the economy really is booming down there? >> well, we're fortunate to be in texas for one thing, obviously. but it's more than that, it's real execution.

and kind of a secret to our success, whatever success we've had, frankly, is finding the right people to execute for you. and we work hard at hiring teams from other competing organizations that can bring their business with them, and that's the organic growth we get. as you said, we haven't bought a financial institution ever. >> so this is one of the things also where you're a local bank for a state and not some out of towner? >> yes. that's exactly right, and i think that helps us too. we work hard at being local home fella to be able to do business with people that bank in texas, and we've expanded a little bit. you mentioned the mortgage warehouse business and a couple of other national businesses outside the state. but probably about 90% of our business is related to texas. >> let's talk about what is strong. we heard from one of the most -- biggest stocks today, a retailer mostly in texas. consumer spending, sounds like

they're buying homes but also creating businesses. >> yes. >> probably far more quickly than any other state in the country. what is that about? >> yes. you know, it's a great place to start a business. it's a business friendly state, no state income taxes. taxes are friendly today, cost of living reasonable. and as you said, the housing industry is really doing quite well. the real estate business, commercial real estate doing well. >> people actually building things. >> people are actually building a few things. >> what would you say? how much if you had to put a percentage on it. oil and gas really booming. how much of that might be just a confidence builder if not actual job creation? >> you know, it's interesting you talk about that because we hear a lot about oil and gas in texas, and that is very important to the state. but it's a lot less important, believe it or not, than it was 20 or 25 years ago. those other businesses that you've talked about, that were started, commercial businesses have grown dramatically over the last 20 years.

so oil and gas is super important, very good for the economy, very good for texas. but it doesn't make up as much of the economy as just these businesses that have been growing for the last 20 years. >> it's not so good to have a boom and bust depending upon a price set elsewhere. >> we have been there before. >> right. george, you're a plain-spoken man, so tomorrow, if we get a big jump in job creation and people think interest rates, the ten-year may go to 3%, 3.25%, bank stocks go down. right or wrong in your opinion? >> it depends on balance sheets and the bank. from our perspective, we believe we're positioned about as well as we could be. >> really? >> yes. today in a low-rate environment, we have floors on many of our loans so that we're not getting the pressure of downward rates. and we're asset sensitive from the standpoint of about 90% to 95% of our assets float with interest rates. and we've grown greatly in

demand deposits. so that also helps our margins and our pricing on our credit. >> well, there it is. that's why i tell people, look, when the smoke clears, buy a texas capital bank, because numbers go higher when rates go higher. >> you're exactly right. and we will do well at higher rates. >> simple good story. no bank regulator, never going to be in front of congress that i know of. not involving swaps, not in the pages, not in the "new york times." congratulations. >> thank you. >> that's george josephs, ceo of tcbi. take the pressure off yourself, find a stock like this one or this one when rates go up and you won't -- let's say you can still make some money. stay with cramer. [ female announcer ] what if the next big thing, isn't a thing at all?

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okay. for a moment, let me put my old trading hat on. let me tell you what i'd be saying to the troops at my old hedge fund. probably saying a little bit today, maybe tomorrow. it would go like this. i guess, guys, we've got to sell those drug stocks tomorrow on a big increase in interest rates after a strong payroll number, right? that's going to be the conversation. quick draw types all over the country are going to be dumping these health care stocks. why not? maybe some will be shorting. i might have shorted them. you can't be a short squeeze. these are big cap stocks that can't be squeezed higher. there are too many shares. but there can be -- and judging by the earlier rate scare this year, there should be a quick 4% to 5% decline in these stocks

over the next few days, because a strong employment number makes them go out of favor. who wants their boring consistency when there will be cyclicals, the giant industrial concerns, that will report terrific numbers when the smoke clears and we have quarterly earnings in 2014. if business is improving, that's what happens. how much of their strong performance this year is because of better than average yields? these health care stocks, come on, they're natural candidates to go down. maybe more than the foods and perhaps more than the real estate investment trusts at this point or the master limited partnerships, because those have been hammered relentlessly already. although i certainly don't want to start accumulating into the weakness yet. is there anything wrong with this thesis about dumping or shorting these kind of health care stocks? yes. first, i've got to tell you, it's so darned obvious that i'm sure someone at my hedge fund will say, jim, well, of course i would have fired someone if they disagreed with me. it's obvious if you get a strong number and rates go higher, that, you know, the scenario's

going to play out, but maybe there's a possibility that people say, okay, that's the big bad event we've been waiting for. that's the one that caused stocks to go down five straight days and now it's over. now it's behind us. what's been thrown away by the market that we like? then someone might actually circle back to these stocks. that's certainly happened before too. it could happen again. if sellers don't panic all at once, they might be buys. that said, the traders among you probably should err on the side of selling stocks. i think simply because the stocks are up huge for the year, and the interest rate competition will be compelling given that stocks aren't using much at all these days after the outstanding performance. we can lump in the consumer package goods stocks here as shares that we don't want to own if, again, we're putting on our trading hats. investors, don't heed this, you'll be going in and out of stocks. i feel like i have to give you some trading advice. what's the point of owning colgate with a very little yield, short-term, at least, long-term i know the story.

what's the point of clorox after such a magnificent gain, such a puny yield. that, too, will be asked around at the hedge fund shops. that's what a lot of managers will be asking. you know i like clorox. i don't like to short these companies and will never recommend such a strategy on the air. that's not what i do. but i do think buying puts on the xlv, that's the health care sector etf or the xlp, the consumer staples etf, does make sense on any lift tomorrow. i don't like to buy them in the vortex of a big decline. you might be able to eliminate some of the risk of betting against an individual stock, where something good might be happening, and you get the protection for the rest of your portfolio that you need. that's hedging. it's a real good hedge. if you want to, you can buy johnson & johnson and procter & gamble. they're the largest stocks in these etfs and my trust owns both of them because they are earnings momentum and restructuring stories respectively. we will be looking to buy them for the trust if they get hammered. i know it shouldn't be that easy. you have to be suspicious of any trading strategy that comes out so easily.

but it sure makes sense if you're calling for the over, so to speak, meaning more jobs as my friend and writing colleague at thestreet.com has suggested to me. and by the way, this man has been dead right on this number. probably the best guy that i know on what the number's going to be like. besides, it's cheap insurance against what could be a treacherous 3.35%, that big leap in the ten-year that will indeed cause stocks to decline. it's going to be a shock to the parts of the stock market that are most sensitive to rates. no, i'm not calling for bonds to go to 3.5% immediately, but bonds do overshoot, and that's where the ten-year could go in a very short period of time after a stronger than expected number. needless to say, you can also just go buy puts on the tlt. that's the bond etf that mimics the direction of the ten-year treasury, like the 13,000 december 101 contracts that traded today. given the tlt went out at 102.43, that's a lot of downside coverage on bonds, and i also would have been tempted to put

that trade on too and might again tomorrow. again, if i were at my hedge fund that doesn't exist now. as always, there are really trading -- these are trading derived ideas, and this is an investing show. but every once in a while, i think it pays to give you the strategy i would have used in my old hedge fund if faced with the need to protect my fund from the downside in a rising interest rate environment, as we most certainly are about to embark on it right now. stay with cramer. i'm jim cramer and welcome to my world. >> one man, one mission. >> i just want to make you money. >> eight years. >> you need to get in the game. >> tens of thousands of miles traveled. >> this new black gold rush is just getting started. it's the sound of american industry roaring back to life. >> hundreds of ceos. >> my life story can be your life story. >> thousands of callers. millions of your e-mails and

tweets. "mad money" thanks cramerica for being with us for over 2,000 episodes. every day we're working to be an even better company - and to keep our commitments. and we've made a big commitment to america. bp supports nearly 250,000 jobs here. through all of our energy operations, we invest more in the u.s. than any other place in the world. in fact, we've invested over $55 billion here in the last five years - making bp america's largest energy investor. our commitment has never been stronger.

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he was on the most wanted list after an $11 million mortgage scam, but then his story aired on "american greed" and led to his capture by the fbi. watch the show that helped put him behind bars tonight on cnbc. i think that's sweet justice. i'd like to say there's always a bull market somewhere, i promise to try to find it for you here on "mad money." i'm jim cramer. and i'll see you tomorrow! >> narrator: in this episode of "american greed: the fugitives," you've won the lottery! promises like this, luring thousands of unsuspecting victims. >> they were very nice. "this is a wonderful experience for you. i'm sure you're gonna be very happy. now, what we need to do to process your prize is the following." >> narrator: but instead of paying a jackpot, roland okuomose is accused of ripping people off. >> not one victim has received any lottery or sweepstakes winnings. >> narrator: now this alleged criminal mastermind is on the